What Is a Market Cap? How to Determine It, and How to Use It

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The market capitalization of a public company, or corporation (corp) for short, is a measure of the value of its outstanding shares. The market cap is calculated by multiplying the total number of outstanding shares by the current market price of one share.

Outstanding shares refers to a company’s stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

The market cap of a company is important because it gives you an idea of the size of a company, and how the size has changed over time. A high market cap can indicate that investors expect companies to grow larger, while a lower market cap means that investors are less optimistic.

To get started with investing in cryptoassets and tokens, you need to know what market cap is, how to determine it, and how to use it.

The total market capitalization of cryptoassets was just under $100 billion in January 2017. By mid-December 2017, this had increased more than 250% to $560 billion.

The term “market cap” is a way to rank the relative size of a cryptocurrency. It’s calculated by multiplying the Price by the Circulating Supply.

Market Cap = Price X Circulating Supply.

The unit of market cap is “dollars” or other fiat currency. For example, the current market cap of Bitcoin (BTC) is $207 Billion, that of Ethereum (ETH) is $48 Billion, and that of Litecoin (LTC) is $7 Billion.

A simple way to determine how big a crypto asset/project is, market cap helps you sift through the vast universe of digital assets to find investment opportunities with exciting growth potentials. In other words, it’s an important metric in your crypto research process.

As you can tell from the formula above, there are two things that affect market cap: price and circulating supply. Let’s look at each one individually and why they’re important:

Price: The price of a crypto asset reflects its value — its use case, popularity, and future potentials — as perceived by investors or speculators at any given time. On exchanges, this value is determined by supply and demand forces – which means price may not always reflect actual value or worth. Thus, when comparing two

Market cap, short for market capitalization, is quite simply the circulating supply of a cryptocurrency (or stocks, or any other tradable item) multiplied by its current price.

For example, if there are 16 million Bitcoins (BTC) in circulation and the current price of one Bitcoin is $10,000 USD, then the market cap for BTC is $160 billion USD.

Market cap is a rather simple concept to grasp once you understand what goes into it.

Knowing how to calculate a market cap can be useful when comparing different cryptocurrencies as well as when looking at a single cryptocurrency over time.

There are multiple ways to calculate a market cap. The most common method is to multiply the total supply of a cryptocurrency by the price per unit of that cryptocurrency.

However, there are exceptions to this rule. For example, Ethereum has a decreasing supply due to the issuance schedule of Ether (ETH). Thus the price per coin must be multiplied by the circulating supply instead of the total supply in order to get an accurate market cap for ETH.

What is Market Cap?

The term ‘market capitalization’ is derived from the two words market and capitalization. ‘Market’ refers to the stock or crypto market which is a place where buyers and sellers meet to transact in financial instruments like shares, bonds, debentures, cryptocurrencies etc. Capitalization in this context refers to the total market value of the company’s outstanding shares or tokens. The market cap helps in understanding the relative size of a company or project between its peers.

For example, if a company has 25 million shares outstanding and its share price is $45 then its market cap would be around $1 billion. However, if Company B has 100 million shares outstanding and its share price is $10 then its market cap would be around $1 billion too even though it has far more number of shares outstanding than Company A.

In simple terms, Market Cap = Price per Share x Total Number of Shares Outstanding

Market Cap can also be calculated using the following formula:

Market Capitalization = Current Coin Price x Total Coin Supply Available.

What is a market cap? Market cap is the short form of market capitalization. It represents the total dollar market value of a company’s outstanding shares. Commonly referred to as “market cap,” it is calculated by multiplying a company’s shares outstanding by the current market price of one share. The investment community uses this figure to determine a company’s size, as opposed to using sales or total asset figures.

Publicly traded companies usually issue two types of stocks: common and preferred. Market cap is only calculated for common stock. If a company has multiple classes of common stock, they are usually treated separately for market cap calculations (although some investors combine them). The market value of preferred stock is generally obtained by multiplying the number of preferred shares outstanding by the current price of one preferred share. This figure is added to the market value of common stock to determine a company’s total capitalization.

Market Cap = (Number of Shares Outstanding x Price per Share)

Market capitalization (or market value) is a measure of the value of a company, or part of it. Market capitalization is calculated by multiplying the number of shares outstanding by their current market price. It can be used to determine the total value of a company, or “market cap”.

A reader asks: “What is the meaning of market capitalization?”

What Is Market Capitalization?

Market capitalization, or “market cap” for short, is the total market value of a company’s shares. It is calculated by multiplying a company’s shares outstanding by the current market price of one share.

For example, if a company has 1 million shares outstanding and each stock trades at $50, its market cap is $50 million. Similarly, if a company has 50 million shares outstanding and each trades at $10,000, its market cap is $500 billion.

In simpler terms, consider that a business sells 100 widgets at $1 each. If those widgets sell out in one day, then the business grossed $100 on that day. Over time if it continues to sell 100 widgets every day its annual sales are going to be $36,500 ($100 x 365). Now imagine that the widget business employs 10 people and requires equipment that costs $10 per widget to manufacture. So every day the widget business spends $1,000 on labor and materials to generate revenues of just $100. That’s not very profitable! But now imagine that this business can scale up rapidly — say by hiring workers or automating production — so that it

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